May 09, 2012

Danish and American Medical Systems, a Basic Comparison

After the American Century 

Americans often hear that the Obama medical plan is socialistic. It is not, as anyone living in France, Germany, England, Holland, or the Nordic countries knows. The fundamental difference can be stated quickly and easily. In Europe, taxes pay for medical care, and you do not need to buy insurance. All residents have a card that they show when visiting a hospital or doctor, and they do not pay anything for their treatment. Furthermore, Europeans live longer than Americans.

Americans have to pay for insurance to avoid paying medical bills. Even so most  policies have rather large "deductables." Often the pateint must pay the first $500 or $1000 or more before the coverage kicks in. There are situations where the insurance company refuses to pay, for whatever reason. And of course there are lots of forms to fill out.

Having experienced the Danish and the British systems first hand, I can say that one of the great things about them is that the patient does not have to fill out forms, save receipts, make copies, or anything like that. You show up, get cared for, and go home. The only administration fromteh patient's point of view  is a simple swipe of a card. That is a socialist system.

What Americans now have is not socialism, but a hybrid system. The health care is still often private, private insurance companies get their hands on a lot of the money that flows through the system, and patients still have to pay quite a bit, by European standards. The Americans have largely private delivery of service, mostly private insurance, and the whole thing costs almost twice as much per person as in Europe.  Europeans have largely public delivery of service and only supplemental private insurance, but not so many people have that. I do not have private insurance for example, and even if I did have such a policy it would not cover the really big operations, which are almost all done in the public hospitals, which alone have the facilities and the research-based expertise. 

Which system is better? In terms of cost, the Americans pay a great deal more, overall, and yet millions of people have not had coverage until recently, and all must buy health insurance.  In the Nordic countries, everyone is covered and the total cost per capita is much lower. In Denmark, Sweden, Germany and France the annual costs (2008) were in each case close to about $3750 per capita. In the same year, according to the Kaiser Family Foundation, the US was spending twice as much, or $7500 per person. Partly this is because in Europe malpractice suits are relatively rare and pay infinitely less than in the US. Tthis in turn means that there is none of that expensive malpractice insurance. I do not mean to say Danish doctors never make mistakes, but the system automatically covers the costs of mistakes that can be rectified, so no one sues to get back extra medical costs, though they may sue for mistakes that cannot be corrected and fatal errors.

In terms of life expectancy, Danes live on average about four months longer than Americans (78.8 vs. 78.5 years). The results are even better in Germany (80.2), France (81.5), and England (80.2). Perhaps Americans should look more closely at Canada, where life expectancy is 81.5, fully three years longer than in the US. (All of these statistics come from the CIA World Factbook.) Putting this another way, because care is universal in Canada and Europe, the poor are generally healthier than in the US, where they often have to go to emergency rooms for treatment and do not have a regular doctor.

In both the UK and Denmark I know from personal experience that I can choose my own doctor, and I also have the right to change doctors if I want a different one. 

I am not going to say that the Nordic system is perfect, but it works well, and I have a bit of extra information, as my wife works in quality control at one of the Danish hospitals. 

For Americans who hate the Obama plan because it seems to rob them of their freedom, think of how free from worry you would be if medical care was a certainty, regardless of your wealth or whether you had a job or not. From Europe, the problem with the Obama plan is that it does not go far enough, leaving so much in private hands and building so much profit-making into the system. Think how much less expensive it would be without all those insurance company salaries, lawyer fees, accountants, court cases, malpractice payments, etc.

So, where do I stand on the Obama plan? It is probably the best that Americans can do at this time, as a compromise between the warring factions. I see nothing wrong with compelling all drivers to have a license to drive, and by the same token see no reason why people should not be compelled to have at least basic health insurance. Yet, if entire states want to opt out of the system, I think that ought to be allowed, with the understanding that then ALL the citizens of that state would have to go over to the local alternative programs or lack thereof. Opting out would create expensive complexity, I fear, but the federal system could and perhaps should allow that choice. Many companies have employees in several states, and administering such variety will be a headache. Moreover, some families have breadwinners in more than one state, creating further possible complexities,

The bottom line: the European system is preferable, supplying care to all citizens and eliminating individual economic ruin for those who have severe illness or who are victims of nasty accidents. No doubt the best care is often the most expensive care, which only wealthy people can afford, in exclusive private hospitals. But very good care is possible at much lower cost than Americans have been accustomed to paying.

Final thought. Japan's average medical costs per person are fully $1000 less than in Europe, but its citizens live longer than in any other large industrial country: 83.9 years. That is more than 5 years longer than in the US. There is no correlation between how much money a nation spends on health care and how long its citizens live.